How poor households exhaust State stipend in one day

Low-income households in the arid northern Kenya counties that get government stipends splurge it on luxury meals and debt repayment on payday before resuming their deprived lifestyle almost immediately, a survey has found.

An evaluation of Kenya’s Hunger Safety Net Programme (HSNP) by the Oxford Policy Management shows that cash disbursed to poor households in Turkana, Marsabit, Wajir and Mandera counties is all spent in one day, after which the beneficiaries begin borrowing again to survive.

The poor households, which receive Sh5,100 every two months, enjoy the temporary pleasures on payday but also spend part of the cash on debt repayment, small home improvements and investments in micro-businesses.

BOOMING BUSINESS

“On payday, people splash out on luxury foods such as meat, vegetables, milk, sugar and rice. These are not bought in large quantities, just enough for the household to eat well that day,” the report says.

The Hunger Safety Net Programme is separate from another Treasury-funded cash-transfer scheme for poor, elderly citizens that will from next year be extended to cover all Kenyans aged above 70 years.

Traders and shopkeepers in the towns where the cash is disbursed are a happy lot as business booms, with greater customer traffic on payday, when many people who may not have otherwise visited the towns arrive to collect their stipends.

The programme, partly donor-funded and currently in its second phase, has seen some 275,978 households registered with active accounts.

But only 84,619 that are classified as Group 1 beneficiary households receive the stipend regularly.